The Centre for Sustainability Excellence (CSE) has released its second annual Sustainability Reporting Trends in North America report, highlighting trends from 551 companies in Canada and the United States during the 2015-2016 period. The report reviews reporting practices, external assurance practices, the presence of carbon footprint metrics and financial performance. This year’s research also includes a comparative analysis of companies that publish sustainability reports with the highest scores in CSRHub, a global sustainability ratings agency.
“Sustainability reporting is an essential business management tool organizations can employ to understand both exposure to risks and potential business opportunities,” said Nikos Avlonas, founder and president of the CSE. “Companies and organizations are aware that ‘doing business as usual’ is no longer a valid option and the shift to ‘doing business in a sustainable way’ is the only solution that will secure their long-term existence.
“Understanding how sustainability reporting is managed is important because reporting is a tool used to internalize and improve an organization’s commitment to sustainable development, covering aspects directly and indirectly related to the company.”
Between 2015-2016, the sectors with the highest instance of reporting in the research sample were Energy and Energy Utilities, Financial Services, Food & Beverage and Mining. While the US demonstrated a higher rate of sustainability reporting in general, public companies constituted the largest percentage of companies publishing sustainability reports in both the US (79.2 percent) and Canada (79 percent). For Small-Medium Enterprises, only 5.1 percent in the US and 8 percent in Canada released sustainability reports during the same period.
The companies with the highest ratings on CSRHub demonstrated higher financial performance than those with lower rankings during the 2014-2016 period, adding to the growing body of evidence of the importance of a comprehensive sustainability reporting strategy that includes goals and externally assuring performance information data.
The report also revealed that the adoption of the Sustainable Development Goals (SDGs) by North American organizations has been relatively slow, with only 6.2 percent of companies integrating all 17 SDGs in their reports. The introduction and implementation of the SDGs is still in its initial stage and CSE research suggests that there are still opportunities for businesses to familiarize themselves with them and begin contributing to their realization. However, 74 percent of the reports examined for the CSE study incorporated some of the SDGs, while 21 percent simply mention them and have stated the intention to review and assess the approaches to integrating the SDGs.
The use of specific guidelines for reporting is growing, adding value, integrity, transparency and reliability to reports. And of the many guidelines available, 65 percent of companies use the Reporting Guidelines of the Global Reporting Initiative (GRI). Globally, more than 50 percent of the reporting companies and organizations seek external assurance for their reports, but the research demonstrates that in North America, 67.5 percent of the reports that were conducted using GRI guidelines have not sought external assurance.
One of the key takeaways from this year’s research is that despite North America’s strong economic performance, it lags beyond regions such as Asia and Europe in terms of sustainability reporting. In fact, while these last two regions increased their level of engagement within the last two years (the number of organizations with sustainability reports jumped from 2488 to 2536 in Europe and from 1825 to 2552 in Asia), engagement in North American actually fell.
However, as the financial and reputational benefits of reporting become more widely recognized, it is expected that more businesses and organizations will hop aboard the reporting bandwagon. Already, the majority of the region’s largest corporations have developed specific climate strategies which aim for significant emission reductions through the improvement of energy efficiency and the deployment of innovative technologies.